>> that was a clear message from chairman powell last week that the economic data still matters. >> i think the fed continues to have the matter -- narrative of hiking. >> they will push shortwave higher until the household and business pain is felt. >> there is a huge disconnect between where the dollars are in where the market is. >> people are expecting the same conditions we saw post-covid and i think the circumstances are different. announcer: this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: jonathan ferro, lisa abramowicz and tom keene. it is simple. an american president has been

indicted for a crime. we will do economics, finance and investment throughout the morning. but there is a different story. this is what you studied in chicago, lisette. it is original american history, yesterday afternoon. lisa a: we did get an indictment for former president trump in new york. there is a question of what the actual charges are. we get them, i believe, on tuesday. they are still sealed. and that is when he is arranged. the question is what is this do for the ongoing election in 2024 but also for confidence in the u.s. political system? tom: i think you are right. the confidence of people, whatever their political persuasion, is something we are going to dive into pure -- dive into. we are looking at key economic data but we are going to stay on the story in the opening block of "bloomberg surveillance". we are going to be joined in

moments with decades of perspective. i have to look at the moment and say boy did we end the quarter strong. where were you january 1? lisa a: i was really bullish. let's be honest. right now, we do not understand why we are getting the data we are getting when it comes to stocks. the fact that s&p is north of 4000 and we are talking about more than a 20% rally since the lows in december on the nasdaq. this is been a big debate. tom: to me, the big debate is these flows within the banking system. some really good things out there. i was at quinnipiac yesterday for game four and everyone was talking about jim from chicago who sent focus on 5% and that is something we have to do throughout the morning. lisa a: when you talk about 5% money market funds, the cash is skyrocketing. tom: and we do not really know

what that is. it is has not come out. lisa a: what we are looking for today is perhaps more guidance on what people's appetite is to spend. 8:30 a.m., we get pci and core pce for the month of february. this core metric, how much does it decelerate or does it accelerate? do we start talking about the data again if we start to get -- tom: john is out today by think he was dead on a couple days ago. we have data mystery going forward to may 3. some of this may be cleared today but i like your idea that one inflation series says better and another says it does not. lisa a: we perhaps are going to try to get some medication. are going to be hearing from a lot of central bankers. 11:00 a.m., christine lagarde is giving a speech in florence. very curious to see how she dovetails some of the rates we

have seen. then, on a slew of fed speakers, we have at 8:45 a.m., then-president of boston with michael mckee later in the day. then john williams and christopher waller at time when the prognostications yesterday left to just as muddled as anything else. basically, we do not know and we are watching like the rest of us. tom: michael mckee was at the business meetings in washington. they have a superb post-pandemic lineup during the last number of days. if you get lucky with history being made with former president trump, your teeth washington indictment correspondent is in new york and we are so lucky to have with us through all of the morning annmarie hordern from balance of power. what was it last night -- like last night when you had to blow up the show because it seems

like everyone missed the indictment coming. annmarie: that is true. there was reporting that they thought this would still be weeks out and the grand jury would not come to this conclusion. the new york times is reporting it took mar-a-lago and the trump world by surprise and a how quickly this came. but of course the former president more than a week ago talked about he was going to be arrested. he has been going after alvin bragg. a lot people thought this was just the former president trying to rally his base. at the end of the day, it was thought that. he was indicted. tom: we are thrilled you are with us this morning. are you on balance of power tonight? annmarie: of course. the whole day. tom: we are also lucky to have with us greg valieva, chief political strategist at ats investments. lisa has a call -- has a hole in

some questions about the indictment. i want to talk about degeneration of realities. donald trump was 28 years old in 1974 when the world was turned upside down by a congressman from arkansas. that was wilbur mills. part of this uproar of indictment and arraignment and the former president's fury is part of a generational difference in what we saw and lived in 1974 versus 2023. >> there are a lot of angles to pursue. that is one of them. i would start by saying lisa is right. they have not unsealed the document so we do not know for sure what the allegations are. if they are for what we they are, my take would be this is a fairly weak case and not a legal theory relying on a convicted felon. the next three are huge. this is just the appetizer, the

hors d'oeuvres. bigger stuff is yet to come. lisa a: we also talk about the potential for its effect on the 2024 election. we heard from ron desantis not mentioning donald trump by name but saying he was not going to allow him to be extradited from fortitude new york. i am curious but this does to the republican landscape. does this suck the oxygen out of the room? >> to a large extent, yes. i think the headline to me would be that trump has a better chance of winning nomination, a worse chance of winning the general election which is the name of the game in my opinion. i think the republican reaction was pavlovian, whether it was mitch mcconnell -- he was one of the few who did not praise trump. that's kevin mccarthy and virtually all of the presidential candidates embraced him and said this was unfair. i think he wins the nomination and loses the general election. lisa a: i'm going to read the

statement from the former president donald trump. "this is political persecution and interference at the highest level of history. the democrats have lied, cheated, instilling in their obsession with trying to "get trump" but now they've done the unthinkable, indicting a completely innocent person in and actively to election interference". how much does this continue the path of the erosion in the competence of the u.s. system? >> it does and it helps trump. he is brilliant at playing the martyr and publicity so he has the mother load right now. it is a bigger issue. you are right. it is confidence. that is the thing for the markets, the economy and the country as a whole. i think confidence will continue to erode. lisa a: how do you rebuild that? >> it takes a long time. first, we would like to see the economy get a little less

confusing. that would help. we would like to see indictments and but we are looking for -- looking at months and months to go with more indictments and trump making claims that actually decrease public morale. tom: thank you so much. greg valliere with agf investments. i am sure we be speaking with him next week. towards arraignment. that is interesting. perspective from annmarie hordern here. i think we all know specifics that we have an indictment and we have an arraignment and there are numerous articles about this. what does your washington look like off the sunday talk shows into monday and tuesday? annmarie: even more divided. we are going to have the democrats. to greg valliere's point, for donald trump to be the candidate and win that is much more sure or likely than him being able to win the general election.

for democrats, all this drama around trump does well for those looking to vote joe biden second term. for republicans, these are going to harden their divine within the party. you will have ones that support the president and take in their heels. just mentioned speaker mccarthy. these individuals coming out and saying this is outrageous. the graham last night on fox news telling people to go donate to the former president on his campaign website. then you will have those like chris christie's want to separate themselves and change the party. they will come out to bigger and say we can no longer win. the former president did not win a second election and was the reason pelicans were saying there was no red wave in the midterms. they are going to save this is not how we went to start reading again. lisa a: whether it is the debt limit or consideration about the banking system, a much does this

change the positioning? harden the lines and effect on some levels to get deals with respect to the debt ceiling because of a quest to adhere to a certain reign of the party. annmarie: it will be incredibly difficult especially for speaker mccarthy. he does not want the cleaning limit the white house says. if the speaker vote of 15 rounds tells you anything, he is beholden to the french part of his party and they will dig in their heels even more. this is becoming even more than just about the negotiations of budgets and debt ceiling. it's is going to be about digging in their heels because the democrats have been "unfair". tom: do you have any belief that the president will "lawyer up" with this indictment and have a whole team of people come in? annmarie: he has a whole team of lawyers. his most notable one has been on

all the shows over the past week, trying to get out in front of this and defend the former president to say alvin bragg is not have the case. tom: we are so lucky to have annmarie hordern in new york today. balance of power something. joe mathieu and annmarie hordern with that. we do economics, finance, investment and a touch of international relations as well. stunning inflation out of sri lanka earlier this morning. near 15% uncontrolled inflation. futures, what a shock. end of the first quarter and they are up. i'm stunned. this is bloomberg. lisa m: keeping you up-to-date with news from around the world. with the first word, i am lisa mateo. as you have been hearing on surveillance, for the first time ever, a former u.s. president has been indicted. his lawyer says donald trump is expected to be arraigned on charges as early as tuesday. the grand jury of men had

decided there was enough evidence to with the case against him for delivering hush money payments to a pornography star during his campaign in 2016. the former president calls it political persecution and election interference. the white house is taking his biggest step yet. it is pressing regulators to tighten rules for midsized u.s. banks. it says the regulation of the banking industry went too far. in the euro area, inflation fell by the most on record but core inflation is at a new high. this highlights a tricky task as it decides how far to lift interest rates. consumer inflation was up from march but down from february. finland has. the final obstacle to joining nato. lawmakers and turkiye unanimously voted thursday to

ratify finland's entry into the alliance. the vote seals a major change in the security architecture. finland and sweden sought membership following russia's invasion of ukraine. turkey and hungary still oppose sweden's entry. tesla is looking to those a client in the u.s. which would be a controversial arraignment with china's dominant electric vehicle battery maker. in recent days, tesla discussed plans with u.s. officials. global news, 24 hours a day, on-air and on "bloomberg quicktake", powered by more than 2700 different journalists and analysts in over 120 countries. i am lisa mateo. this is bloomberg. ♪

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>> it does not come as a

surprise at all that the mistake of transitory inflation and the mistake of not moving fast enough to begin with resulted in the massive increase and accidents. when you are overly data dependent and the fed is overly data dependent -- when you are acting with tools that have an impact over time, you cannot react to every bit of data. you have to have strategic anchoring. tom: mohamed el-erian was francine lacqua. it is not as romantic there late march as you would think. we were freezing there. francine lacqua had frostbite on her nose when year. it was so cold there. i had my photos online was ready to swim in the -- my floats on and was ready to swim in the lake but forget about that. lisa a: what we were hearing there from mohamed el-erian is echoes of what we heard from reinhard yesterday. when you look back, this was a

feeling of zero rates and negative rates are as long as they were and now we are dealing with a train wreck of trying to normalize something that was incredibly abnormal. tom: it was not just david folk at a boy too saying this would have huge balance sheet affects -- david from deutsche bank saying this would have huge balance sheet affects. but when you calculate the speed and acceleration that is where we stand here at the end of march. lisa a: which is why we do not know anything and are all standing here trying to figure out how to chase our tales. tom: yes, we will cover the political events in washington and what we will see in new york on tuesday but also we will stay on "bloomberg surveillance" plan. now, martell. you are a genius. he told us in early january to have face that faith and confidence. you have to participated in the

markets and certainly you have seen that with a general lift end nasdaq list. for income, do you still skew for equities versus income from bonds notes and bills. >> yes because we should have short-term volatility probably snow reckoned on the growth. high-yield right only offers 7% to 9%. if we have rates go up, thus can be eroded so much. it seems the opportunity says hold in there and stick with equities. tom: is part of a balanced portfolio now dividend growth? the dividend itself but the growth of future dividends? margie: yes because you could easily see companies raise dividends i say to-three-5%. in a few years, those can be changed with investment-grade bond. lisa a: right now we are seeing

investment-grade data that can tell you the story you would like to see. nursing robust growth and trajectories. neither hands on the margins. credit card receivables, people are trying to spend yet -- less. how do you take anecdotal data and say focus on the now because that is going to tell you where we are going echoes margie: i think it gives you the first hints that the fed's process of raising rates aggressively is having an effect in the real economy and we are seeing more and more signs of that in the terms of weakness in certain areas. it says you have to be more choosy on the equity side for companies that can change earnings during a pretty difficult gross period. lisa a: what is the argument for equities right now at 10 was -- a tenuous time versus bonds higher than they have been in decades at a time when balance sheets look good?

margie: corporate balance sheets look good and hide your looks good but the yields themselves are only modest compared to if you have gotten for equities over a longer term. high-yield is only 7% to 9%. if rates go up on treasuries and powell continues to raise rates, you could see them go up and prices go down. in equities, this is a good time to take advantage of the negative attitudes, risk uncertainty, and say i'm going to wait and and being paid to expect volatility. tom: this is important within the move index and the gyrations in the two-year yield, this morning 4.6%. of days in a row. in this friday, at the end of this quarter, the flows are a flow of gloom. people are scared stiff is the end of march summary. lisa a: michael harden put out there was more than $60 billion that flowed into money market

funds over the past six weeks versus $5 million withdrawn from equities. i do wonder on the bond stock valuation proposition how much pushback you get when they say how can you hope were much bigger gains and stocks at a time when you are having ongoing reevaluation in newly high rate environment? margie: i do think interest rates are going to be higher than they have been over the last decade. the zero rates period has passed its means dividends will be a bigger part of return. when you look at the economy, it is in very good shape relative to other country's economies around the world. that says to the it will be muted in equities but that is just a year of muted returns. lisa a: what would you have to say to change review? margie: say again. lisa a: what would you have to see to change review and make

you less constructive? margie: i would say we had one hand in the gdp data yesterday and we had gdp positive 2.6% but we saw positives -- saw profits negative by around 2.7 percent. is this a sign that the fed's aggressive policy is beginning to bite into corporate profits and they can no longer hang onto pricing power and maintain margins? i would say that is my big concern. in the fed continuing on a misguided pass of aggressively raising short rates and not looking at the whole economy. tom: you go on commonwealth avenue and if you go past the 0-1 boston red sox at fenway park, you will get a lesser -- lecture from a university on the appropriate bond issuance we should have. the biggest news of the last 10 days is united health care star enormous issuance. are we going to see more of that?

margie: we might because there is a tremendous appetite for fixed income securities as you allude to in talking about these flows in the money market. good company investment-grade or better quality high-yield. there is insatiable appetite. tom: margie patel, allspring global investments. rumored to be pitching little league for boston red sox after they gave up 12 or 14 runs yesterday. it was pain. opening day is a religious experience. it was like dante inferno yesterday. what is so important with margie patel -- describe this. you do a bond offer in literally in four phone calls, it is sold. lisa a: there are a lot of people saying bonds are a better value than stocks because you are getting historically high yields at least historically over the past couple decades of high rates.

then, you see what actual returns are doing and stocks are still outperforming. at what point do you lean into that like margie said despite all the naysayers and people saying height -- higher rates cuts valuations in the long term? tom: part of this is a consensus view. identify what is consensus and go against it. lisa a: good luck going against -- trying to find consensus right now. money market funds have reached the record in the u.s. at $5.2 trillion. still a question around inflation. today at 8:30 will be a really important moment we be gets gut check of whether core inflation of the u.s. is actually coming down in europe. it is not. underlying core inflation in the eurozone does hit a new record which highlights a dissidence with people trying to focus on ongoing weakening when you are not getting the same readthrough of inflation.

tom: personal income, real personal spending all at 8:30. the pce defender michael mckee is focused on that because 15 minutes later, he will be speaking to susan collins of the boston fed. she is an extraordinary academic. i cannot say enough about her. susan collins of the boston fed with our michael mckee at 8:45. stay with us. this is "bloomberg surveillance". ♪ ts... ...designed smarter. like a smart coffee grinder - that orders fresh beans for you. oh, genius! for more breakthroughs like that... ...i need a breakthrough card... like ours! with 2.5% cash back on purchases of $5,000 or more... plus unlimited 2% cash back on all other purchases! and with greater spending potential, sam can keep making smart ideas... ...a brilliant reality! the new ink business premier card from chase for business.

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tom: "bloomberg surveillance", welcome on a historic friday. a former president has been indicted for a crime in america. that'll be part of our theme for the morning. as we stay on scripts, economics, finance and investments and such. great guest coming up. the nasdaq goes the other way fractionally. the vix is still under 20. 19.24 with an 18 glimmer. earlier, bitcoin with some resilience here at 28,000. where to be go first in the terminal? the two-year yield, 4.1576%. lisa a: when you take a look at what how this leads into future projections.

4.3 percent now expected for the fed funds rate in january of next year. that is up from under 4% just a couple trading sessions ago. but she waiting, pushing up a little bit. can fed officials guide this hired to give the feeling they will hold rates and not cut them later this year? tom: firm journal 15 years ago that she get the parlor game with lease out here. i understand it is a big deal. the thing about this is the curve has shifted. the parlor game has shifted over 90 days. lisa a: suddenly, people are back to lower for longer. there is an issue to where china sits in to this. basically the reopening that did not happen. new data out of china shows economic recovery is accelerating. we saw human -- cpinminman joke.

we have to wonder at what point do we start talking about the readthrough of commodities in china affecting growth. tom: i am glad you did this because it has been the 14 day conundrum. i go back to goldman sachs and see it as lifting of china after a lot of thought. we have two things this morning with william lee. bill lee is chief economist at the wilkin institute, preparing for the important west coast meetings. we must get to california and a san francisco federal dr. lee. but first, on china, the last time you partitioned china of domestic economic resurgence and therefore in effect. is that still a two-part discussion? bill: is it ever? the latest pmi numbers so the boost to china's activities are

coming from the nonmanufacturing sector, both construction and --. the global economy is not recovering enough to boost china's manufacturing sector to where it was pretty covid. china's policy has been oriented toward boosting domestic consumption and it looks like the rebound from the cove down -- the rebound from the covid lakhdar is part of this. the real question is, will this restain itself? it will not be sustained unless we get income and property market settlement. right now they are still in the doldrums. tom: that is where i wanted to go. the solution always is keep the people employed in china and always healed the real estate sector which is so important for some form of individual investment. is that occurring right now? are the people employed in this real estate healing?

bill: the private sector in china is reluctant to invest and employ people. the biggest problem right now is college graduates are not finding jobs you have huge unemployment in double digits, 15%-20%. the big problem is innovation. are we going to get the innovation into the tech sector to offset some trade restrictions? right now, china is trying to boost research but they have also reorganized the government to change governance in a way that controls innovation. the government strain now is regulatory agencies are now all under the control of president xi jinping. that gives a warning sign that says innovation will be for the benefit of the center. xi jinping told us that in his speech a year ago. the fact that controlling innovation means they may not get the kind of technological boost and productivity they so desperately need, given they have a declining population.

lisa a: it seems like it is not a clean recovery story but a model which means people can kind of strike it off and in their narrative whack-a-mole moments, move on to other issues. do you think this is appropriate? do you think it has faded into the background and the preeminent story is the concert is of how quickly central banks are raising rates? bill: the biggest source of policy error right now it's for the fed to worry about what is happening to a couple bad banks and the runs associated with badly managed banks. conflating these two policies will cause the fed to really miss vote in terms of getting inflation under control and conflating a problem of vast supervision the financial stability. we do not have financial stability risk. we have a lot about the managed banks being stiffed out by the markets -- and lots of badly managed banks being stiffed out by the markets.

supervisors have completely fallen off the boat in the sense that vice-chairman bart told everyone we gave them three notices that they had to fix their government structure and risk management, and they ignored us. what does that tell you? we have a broken supervisory system, not a lack of regulation. tom: this is important nuance. was it the state of lack of supervision or below-average supervision or was it overwhelmed by the rate of change of monetary policy? bill: it would be a nice narrative at that were true but we do not. we have a really special environment in the west where the silicon valley crown is really subject to groupthink and social media influence. once we saw how the influential investors other money out of central valley -- out of silicon valley, then the story got started that there was something wrong with small banks as opposed to there is something

wrong with the bad management at silicon valley bank or crypto banks that specialize in holly -- highly volatile industries. destroy got so exported to the point where janet yellen, the fcic and the fed all said are going to have a new lending facility to give liquidity to small banks. not all small banks needed it because it was specifically badly managed banks that were not well supervised. lisa a: we will be talking about the postscript and during the autopsy on this for a long time. in the meantime, people are trying to game out how much lending standards will tighten and how much you will get restraint with respect to credits available for smaller businesses. you have a handle on this? especially when people are saying we are not seen this yet in empirical data? bill: back in the 80's, one thing president corrigan was obsessed with is how much does lending like this affect the

economy? were much more into this now than where the credit flows were going. bank lending his small businesses and specific sectors hard. most of the american industries and american businesses raised money through the capital markets. as long as capital markets are able to keep any flows coming, he will not have oppression affect on the u.s. economy. i think the conclusion hold today. lisa a: if you bring it over to what this means for on a trade policy, are you worried this federal reserve and potentially the ecb despite the hawkish rhetoric will move too quickly away from the rate hikes and follow the markets into rate cuts at a time when the economy is more resilient than people think even with the baking stresses? bill: i think there are some sane voices on the fcic. susan collins later has also

seven will continue to raise interest rates because we need to fight inflation and will worry about the economy as it comes along. if there is a sign of credit crunch, will have -- this might be my words now, we will improve supervision and have specific bank policies, not monetary policy. i think that is the right way to go. one thing we have to keep in mind is filled supervision should not interfere. tom: thank you very much. bill lee from milken institute. we do not go to that. it is too early in the morning. bill lee, exquisite with his imf. as talk about that. begin pass this week and in april to look at the spring meetings of the imf. these are unusual. lisa a: if you do not have visibility on the moment, how do you create cohesive policy.

as we saw within europe with respect to the core metric coming in hot, how do you look at a looking data and come up with for looking policy to guide an economy? tom: how do you do a world economic outlook with all of their abilities, given the rate dynamics and volatility we are seeing? i think this is the hardest task they have ever had. lisa a: when you look at political data, there has been a lot of talk about the discovery of political data at time when people do not answer and are just doing quizzes all the time. if you take a look at credit card spending, it has gone down quite a bit. citigroup came out with a report quite a bit and so did bank of america. if you look around at peripheries, you can see tensions on conference calls and earnings calls. people mention cutbacks more than they do hiring and labor shortages. these are the ending settle

those -- the anecdotal notes apostle is something shifting. tom: we can talk about this through the show this morning. a faculty member came up from the south and says, tell damian sassower we are so excited his offspring is attending miami. he is a stud there. he is like -- a whole emerging-market thing and sri lanka and turkiye and argentina and the rest. it is a disaster out there. lisa a: because of their or because of his brackets and what they are doing? are is a larger question about if we are in the press with a game changing moment. he spoke with mark mccormick yesterday about a weakening trend in the dollar. is there some significance there? tom: visible argentine peso, 100 , 120, 140. the agony argentina is going

through now. there is a black markets argentine peso. yesterday, it went over 400. how does a society as sophisticated as argentina live with that? lisa a: this is the problem with 2023. you can point to argentina which has been a problem child for a long time and uses as an anecdote or you can point to others that have a more secure situation. tom: lisa and i will review our problem children. it will be excited for the weekend. daniel ives of wedbush. must listen. dan ives coming up. this is bloomberg. lisa m:[speaking non-english language] -- keeping you up-to-date with news from around the world. with the first word, i am lisa mateo. history has been made as donald trump becomes the force former universe president -- the first former u.s. president to have charges against him.

as for his role in paying hush money to a pornography star during the 2016 election. he could be arraigned as soon as tuesday. he described this as the latest effort to destroy the make america great again movement. the biden administration is going to unprecedented ranks to lay down the importance of taiwan's president to the u.s. it is an attempt to keep the relationship with china from getting worse. people say beijing's unhappiness may be more muted than expected. mohamed el-erian says the worst of the banking crisis is over but the chief economic advisor says there are so warning signs. mohamed el-erian spoke to francine lacqua. >> this is not 2008. two thousand eight was a sudden stop with things just stop because the payments and settlement system was in place. this is very different and will play out probably in the third and fourth quarter and have a

long payout. lisa m: mohamed el-erian also writes for bloomberg opinion. the u.k. is trinity and pacific trade bloc in a post-brexit deal. it is a comprehensive agreement for transpacific partnership. rishi sunak's government sees a growth of 2.2 billion dollars over the long term and that can gloat -- grow if others join. global news, 24 hours a day, on-air and on "bloomberg quicktake", powered by more than 2700 different journalists and analysts in over 120 countries. i am lisa mateo. this is bloomberg. ♪ i'm bill lockwood, current caretaker and owner. when covid hit, we had some challenges like a lot of businesses did. i heard about the payroll tax refund, it allowed us to keep the amount of people that we needed and the people that have been here taking care of us. see if your business may qualify. go to getrefunds.com.

what does it mean to be ever better? its your customers getting what they ordered when they expect it. discover how ryder ecommerce makes your customer's experience ever better. >> there are still technology companies doing well. this period reminds me of coming off the tech crash in 1999. we had a very overvalued situation in tech. many of these are because the companies overspend or with cheap money and went into areas they should not have gone into.

that is restructuring to get back to basics and whether there is value making money rather than trying to send a man to the moon. tom: steve pali bucha -- pagliuca. the red sox will not lose today like they lost yesterday. this is important. there are not playing. that is why they will not lose. the mets even win when they do not play. it is a magical gift they have. lisa a: nobody has ever said that. this is one of the big questions we have had in almost 20% gain since december. take a look at meta up more than 70 percent. if you look at the returns on facebook, is it justified? people are saying this is just because people pricing in lower yields or is this something more sustainable? year of efficiency coming to an area full of cash.

tom: we are going to stop the show right now and get some humility from dan ives who is -- to absolutely nailed have courage and say without the. you heard me tell the story before. a zillion reasons apple was going to blow up. you stood on fifth avenue and just all the reasons the apple game was done by it was not. there were so many reasons to sell apple 90 days ago. what do you see 90 days ago that gave you confidence? dan: the installed base of apple is so underappreciated by investors. what we have seen ultimately with our checks that demand, despite yelling fire in a crowded theater, has actually held onto the rock of gibraltar. tom: let's get over to my friend who holds the high ground on apple technology. as part of your calculus of apple higher with a new trip? to me, chips are the bedrock of

why they do well. are we in a senior of chips? dan: i think you will have chips as well as the arvr in terms of apple glass. you have the biggest installed base in consumer and now you are further monetizing its services. in this environment, you can never underestimate how bad a management team is or how good the tactician or hall of famer cooked is. i think navigating apple back to the 3 trillion dollar market. lisa a: when can we stop talking about big tech and go back to hardware companies and cloud companies and something specific that caters to a different cycle then each of the companies combined? dan: if you look at clout and microsoft, that demand has held up. that is starting to seep into what we have seen with the

broader group. cybersecurity is a pocket of strength. overall, you hit on a great, in terms of big tech -- the cost-cutting. once the started to happen, the bottoming of tech was done. i believe there is so another 10% or 15% upside in tech. lisa a: but a lot of people think it has already gotten overblown. there are different types of job cuts. because you have access, because you over higher, and you have a lot of excess weight. but there is also cuts because you see the potential for growth diminishing at a time when you cannot borrow at the same time and there is less demand and people have already loaded up on devices and services during the pandemic. how do you distinguish between those two? dan: between populist head and frothy tech, a lot of this has not come back. but when you look at high-quality tech, they cut

costs and have been spending late 1980's rock stars. stopped and now numbers have stabilized. on the other site of this, you are seeing strong demand that is starting to come back despite the macro. i think that is what we have seen with apple in china. lisa a: we will get to china in a second but going forward? -- going forward, is there any techies you did not anticipate? dan: when you look at some of the hardware players, what is happening is the likes of microsoft. you are seeing some bigger tech players more and more like a powwow during cybersecurity. i think ultimately, the headline of q1 earnings is going to be wow, did not fall off a cliff. ideally, something more to embrace. right now, the new york city cabdriver is even bearish on tech.

i continue to like this dynamic as it plays out. [laughter] tom: it is time for the gossip hour and we can always do that with a well-dressed dan ives. a disney-apple meeting. that to me is just like an ip frenzy. the lunch at the sunset tower hotel, mr. cook hanging out with mr. iger. dan ives is over a couple tables. you banks are surrounding. any ability for apple to acquire density? dan: i think it is a possibility. the difference for apple is this is the first time in their history that they will have to significantly look at mna -- m&a. when you look at disney, i think this is a time that cupertino which has never done m&a will have to look. if disney comes, that

strategically as a marriage makes a ton of sense. tom: my take on this -- i will not try to be nathanson or daniel ives is these always fall apart when noncreative take over the process. do you have confidence apple management can be humble enough to let disney an creators like mr. iger be creative? dan: i think this is something that uniquely they can balance. ultimately, if you look at the marriage and what this could do, apple and disney, that could really be the golden goose. something apple has been missing is content. that is in terms of streaming services and would be a hundred billion dollar business in terms of service. gurman talks about this all the time. services is the jewel that has been the kiwi rating at apple. lisa a: you mentioned tiktok and china and with respect to apple. how much is this a fly in the ointment. we hear tim cook is heading to

china potentially in april. is this going to become a liability for companies in time of increasing tension between the u.s. and china? dan: tim cook as part ceo and part --. ultimately, apple has 100% iphone production, 20% demand but this ultimately continues to be part of their success. tom: what are we going to get with a little above $200? i have to make some news. dan: in terms of our tech, this is a stock that is going to have, i believe, back to the $20 trillion value. you start to look ultimately now what i believe is a $15-$20 upside. tom: i did not get it out of him. he has compliance. lisa a: dan ives, that was wonderful. i thought that was interesting

given so many people are shrugging off the story of tech preeminence. people pricing in lower rates and that pulling the story right back. it seems the efficiency story is coming in perhaps in a more specific way. tom: wait a minute. i am surrounded by mets fans. at this. dan: i think this is the year for the mets. tom: are you going this weekend or soon? the sicko i am going to crawl into bed and stay there like everybody in the market because it has been an exhausting couple of. i am looking for a dark, quiet space. tom: we call this the land of the boston red sox. [laughter] tom: go away. futures up. what if you call that? the vix 19.20. rv watching into the key

economic data? something into the vicinity of 4.5% on the 2-year yield. the pce is the important inflation item for the fed. that will be front and center. spending and savings is going to be a big deal. lisa a: it is funny. we are not talking about the university of michigan sentiment survey because people do not care anymore. tom: i have never been a fan of it. the sicko fan or not, jerome powell was talking about it last year as a key indicator and now we are not moving on that. tom: annmarie hordern will be with us on the indictment from yesterday. also, a timely gas in the next hour on the nations monetary policy will join us. ahead of the blackrock investment institute. lisa abramowicz, mets fan. this is bloomberg.

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>> that was a clear message from turman powell last week that the economic data still matters. >> the fed can continue to have the narrative of hiking. >> they are writing to continue to push short rates higher until the household and business pain is felt. >> we have a huge disconnect between where the guards -- dots are in where the market is. >> i think additions are very different. >> this is bloomberg surveillance with tom keene, jonathan ferro and lisa abramowicz. tom: good morning everyone.

a historic friday. an american president has been indicted for a crime. will touch on that in a moment with annmarie hordern, the host of balance of power. also looking at economic investment at the end of quarter and we start strong in this hour with jean boivin. lisa a: how do you parse the strong quarter we are seeing with all the negativity are seeing from economists. michael mckee was at the convention of business economics talking about how there was a problem, and that was reflected by ceos and economists etc. tom: to me, it flows as well. at the biller here earlier this morning. the mystery in the first quarter besides where was i in triple leverage in cash, i should've loaded the boat in nasdaq, but the mystery is that the banking system. overnight, many bank stocks have

not recovered like some tech giant. lisa a: but he just keeps flowing into money market funds. we saw the money markets's in the u.s. urged to 5.2 trillion dollars, up more than $300 billion since the beginning of this month. we have seen a flood of money shifting around the financial system at a time when it seems t normalcy. tom: we are going to drive the conversation forward at 8:45 this morning someone many of you do not know. let's introduce susan collins of the boston fed. her academics is bulletproof. she has been wonderful at harvard and m.i.t.. usually associated with the university of michigan. a professor there. she brings first order academics to the fed as an influential president of the boston system. the sicko it is fortunate to get

-- lisa a: it is fortunate. unfortunately, they do not have a precedent for this. are going to be hearing from her and about the banking mystery and conundrum from small and medium-sized banks and what this means for lending right after getting core inflation data in the u.s. that may show it is not going down. it is to lay probably central bank needs to fight. tom: the two-year yield is essentially five days higher yield and the two-year yield branching out over 4%. futures, what a surprise at the end of the quarter. the view is higher. levels in equities, 4100. spf, not there yet. 33,000 on the doubt. i cannot believe i'm saying this. 13,000 on the nasdaq. we do this with the vix 19.2. i got this so wrong 30 days ago. lisa a: said and everyone else. enjoy the club. who got this right?

very few people. this is the difficulty right now. how do you cohere the strength we are seeing with equities the economic weakness? trying to parse through with the reaction is from the fed. we get core pce and personal income and spending at 8:30. if we do not see spending, how much will the markets have to violently reprice back to what it was three or four weeks ago? tom: nation to nation, we have headline going in one direction and core in the other. that is the overall theme. lisa a: we also have rolling inflation that keeps this going longer than people would have liked. 11:00 a.m., the reaction gets guidance from christine lagarde of the ecb, giving a speech in florence. when you talked about some of the fed speakers, we do hear from susan collins speaking with

michael mckee at 8:45 am we also hear from new york fed president john williams, fed governor lisa cook, fed governor waller all coming out. my issue is how do you know when there has been enough baking stress to outset the power of certain rate hikes that otherwise would have been put into place? tom: we must turn to politics now. we do this through the prism of balance of power. off-site, at the 5:00 hour, there was a show. annmarie hordern said i think we need people of the show. how surprise where you? annmarie: it caught team trump off guard. they were not expecting this that soon. but people thought maybe down the room. the former president said he was going to be arrested. the senate earlier this month that he was going to be arrested -- he said earlier this month that he was going to be arrested and started campaigning off it.

tom: this is new york state, the southern district of manhattan. the other issues former president trump has are much more federal tone. annmarie: in -- and in georgia. tom: what is the difference between these cases and what pros are saying are more important than this case? annmarie: this case goes back to 2016 it is about the former president paying funds to quiet what would have been a scandal for him going into a federal election. tom: this is secondary to others that could be coming? annmarie: i will not say to the american people what they should regard as primary or secondary. what everyone is talking about is potential concerns of the other cases because they have to do with inciting an insurrection and overturning the 2020 election results. that is the one the georgia da is focused on.

the final one is what the president of the fbi found which is classified documents at his mar-a-lago estate. all of this has been looked into. what you can see now with this indictment is all this could coalesce around the former president at the same time. we know the special grand jury that is looking into the other federal cases subpoenaed his vice president mike pence. lisa a: there are a lot of broader issues. you have the 2024 election and confidence in the political and judicial system. i point to this statement by donald trump in the wake of this indictment saying this is " legible persecution and election interference at the highest level in history. the democrats have lied, cheated and stolen in their perceptual trying to get trump but now they've done the unthinkable, indicting a completely innocent person and an active blade to election interference". how does the rank and file in

congress and the administration counter this at time of what they say will be viewed as interference or self-serving? annmarie: the white house will not say anything. they think this is more drama for a potential presidential candidate. this is not just a former president. we have never seen a criminal case against a former president but he is also a potential candidate. he could be facing off at joe biden in 2024 so the white house does not want to impede on it. they think if this is trump drama, they can run against this. rank and file republicans? what does this mean anymore? you have speaker mccarthy coming out and jim jordan. all these people saying this is outrageous, a "witchhunt" and politically motivated. but what do you think about others who think that we could move on from trump and have a different candidate in 2024?

you will see a party that becomes more divided. the republican party will become more divided and hardened and potentially also by the other investigations. the sicko was are the policy locations of this -- lisa a: what are the policy implications of this? annmarie: there are no direct implications but you will see everyone talking about this instead of potentially important issues at the moment like the debt ceiling. we have speaker mccarthy say yesterday if the white house does not act, maybe we are going to have a bill on the floor. they are trying to hone in on what they are going to react to. but we are not talking about that anymore. it's what may be some people in america want to hear. are we going to have financial calamity the summer? no, we are talking about the former president being indicted. tom: assess rick as it is, it is clearly on the radar for people

-- as historic as it is, it is clearly on the radar for some people. part of this is the scandals in whatever form they are, and the historical memory we have scandals. we do not need to go into a history lesson but basically this is just a good old political scandal. annmarie: but historically, when there are political scandals, you have seen american leaders step back. i think of nixon. i think of even al gore. there was a recount going and he said i want to remain -- i want to put country over percent. we have not seen that. tom: professor zellweger says that. he says the distinctive feature. this is a unique moment because the former president has a history of decades where he does not like to step back. i am using her words, not mine.

lisa a: just screen talks about this. annmarie: yes, i was just reading his opinion. that is how he contextualizes it with how this is different from other big logical historical moments in america and how former leaders have handled them and why this is so different. tom: so three hour balance of power tonight? annmarie: only if you join. tom: stepped right into that. annmarie hordern and joe mathieu tonight. they are working to get some important perspective on this moment for the nation. the sicko and marie mentioned the joshua green article -- lisa a: annmarie hordern mentioned the joshua green article. you look at silvio berlusconi and lula da silva and a whole host of other international leaders, it raises a question of what is this thing on the international stage for the

u.s.? tom: i agree. i do think there is international ramifications. you mention the confidence in washington and across the nation. i do think it goes across to international as well. we are going back to what we do which is economics, finance, investment. jean boivin will be joining us. and someone everyone is talking about, exceptionally intelligent -- use of elon musk's twitter. jim beyonca to join us in the 8:00 hour. stay with us. lisa m: keeping you up-to-date with news from around the world. with the first word, i am lisa mateo. as you have been hearing, for the first time ever, a former u.s. president has been indicted. his lawyers say donald trump is expected to be arraigned on charges as early as tuesday. a grand jury event had to decided there was enough evidence to proceed with the case against him for directing

less money came into a pornography star during his 2016 campaign. exact charges have not been released. the white house is taking its strongest steps yet in response to the banking crisis, pressing regulators to tighten the rules for midsized banks following the collapse of two regional lenders. the white house has the regulation of the banking industry went too far. finland has to the final obstacle to joining nato. lawmakers and turkiye unanimously voted yesterday to read a five finland's entry into the military hawaiian's -- military alliance. >> our military is in good shape but joining nato means we would be covered by the article five so any difficulties which appear to us or any other nato country, the whole of nato will defend that country. in this case, with a war in europe, the russian aggression against ukraine, this is a very

important step. lisa m: finland has 800 miles of common border with russia. the burglar to tesla is looking to build a valerie plame in the u.s. which will likely be a -- build a battery plant in the u.s.. global news, 24 hours a day, on-air and on "bloomberg quicktake", powered by more than 2700 different journalists and analysts in over 120 countries. am lisa mateo. this is bloomberg. ♪

>> we are headed towards a hard

landing, a credit crunch, and significant amounts of launches -- losses. for savers and creditors because rising interest rates are affecting the market. you have financial instability, price instability, and economic instability. tom: agreed to european economist of the study of the economic balance sheet. nouriel roubini, he advised president clinton years ago. he was there with francine lacqua and matt miller. all i can say is he is absolutely -- he absolutely nailed giving monitoring moves the balance sheet crisis that can occur. once again, he crushed it. lisa a: we have continued to see that. there is question of what actually shows up in the data and not just peripheral anecdotes we keep hearing. it all makes sense. it is a logical argument and yet

we have continued to see profits deliver in the labor market say strong. when is it ok to look now rather than the expected future? tom: i am talking about for this year which is the strong get stronger as we saw with dan ives and apple. it be that is the theme coming out this quarter. have a special treat for you. enters of. the nasdaq futures just turning green as well. the vix is 19.16. a nice take for the key economic data in 15 minutes. jean boivin, head of the blackrock investment institute of canada and his work at princeton. i am thrilled that he can share his opinion. you know i do not want to talk -- like to talk about it but i went to get into the cards the fed will be dealt before the

main third meeting. what data is blackrock looking at so the fed can assess the system better on may third? jean: to start with the obvious, clearly you just mentioned the date of this morning. the personal consumption expenditure data and what it will tell us will be a central piece of information. we have been of the view that inflation is much stickier than was to be expected and generally that is becoming more consensus now. that is going to be a key piece. we do not think inflation is going anywhere close to what the fed cares about. we are more in the 4%-5% range at this moment. that will be a key piece beyond that. i think they will try to look for confidence in the fact they stabilize the banking side of things. that is a separation they are pushing for. there are general with inflation up with one instrument and

financials with another instrument. as long as this continues to show signs of stabilization, this will create the result of continuing to focus on inflation. lisa a: which is the reason why you and your calling have come out of said the market is wrong, the fed will not cut rates as more -- as aggressively as people are expecting. how much are fed officials hands tied at a time when the market has priced in rate cuts. if they come out and violently pushed back, you could get a jeopardizing financial stability. jean: this is a tricky environment because it is about to quit tea. you want to be able to steer the ship in the right direction but to be able to do that, you need the whole crew to push in the same direction. here we have a disconnect. it is not new but has been going on. we have a massive disconnect generally. it winds a bit during february

but is reopening now. we are clearly of the view that there is no -- in the car in 2023. we are taking questions about windows this past? it is about pausing, not cutting. this will make it tricky but it is what makes the situation very important for them. this is where you get to are you going to be clearly keeping your eye on inflation or start to be swayed by other considerations and start to blow -- the picture? i agree. massive disconnect. it could be tricky which is why we are pretty cautious at this moment. but we think the fed will very unlikely use the whole playbook. lisa a: given the repricing we have been seen over the past couple weeks, which asset class is more mispriced in your view? credit or equities?

jean: equities is where we have the most concern. when it -- with credits, we have scaled down the overweight and are neutral now. we have moved from positive towards aligning more with the equity view. but the equity is where we have seen more mispricing. i think there is significant damage to come. we have seen cracks of hearing that is not reflected in equities yet. moreover, i think the markets are still betting on because which will not materialize. if you put that together, that will underweight equities. tom: i was hurt a conversation. modestly off the record but i think i can talk about it with a guy named ben bernanke. he brought of hockey stick charges. we have the mother of all hockey sticks with this rise in interest rates. what are the ramifications, the outcomes, of a little fed courage to go pause, posco,

pause? if they take the slope out of the rate of change of the rise of interest rates and just pause, pause, pause for three meetings, what happens? jean: the hockey stick story is more likely have not seen yet the impact of the most rapid rate hike cycle since 1980. that was bound to create cracks. i think that has profound locations that we are just starting to see. the story of the last couple weeks with the banking crisis is -- there was an interesting credit story with these institutions but the broader story is what we have been calling, for light of a better name, the economics of deposits. for the last few months, we have been seeing the race you can get on short-term instruments like money market instrument funds, etf's, shorter duration government bonds. it has emerged very

significantly from deposit rates. what we are seeing is deposit outflows from the banking sector. this is something we have not seen since -- you have to go back to the early 2000's. this profound adjustment still has not appeared. i think this is a big deal. we might see pause. those effects are so in the system. the hockey stick is more a rapid hiking cycle still playing out for me. tom: if you were to speak to kristalina georgieva, would you advise her the instability would be the norm in the summer? jean: i think this is the new regime. we have been going back there. we have been saying the new regime, the great federation, is over because of the fundamental change in what has been driving the macroeconomy which is more about supply, production exchange and transition of climax.

that is bound to be more volatile. i think if we can avoid volatility, solely for the summer, i think we are in the environment for some time. we are going to value opportunity we need to trace. tom: thank you so much. jean boivin from blackrock institute. have been leaning on this idea of bank flows and clearly into the zeitgeist and rate and reading -- and weekend reading, it will not be the drama of february or march but the flows will be there. the disruption will be there. i do not hear anybody talking about the easy road of pause, pause, pause, just to give them time to observe what is going on. those dates, may 3, june 14, july 20 sixth. maybe on july 26, they can reassess. lisa a: a's comes -- a pause is

more difficult when the market is pricing in cuts. if you do not deliver that, you will surprise a market that has already moved way beyond. tom: but the fed says we are not going to see cuts. if bank of america says forget about it. lisa a: exactly. at the same time, profits have held in there to some extent with companies that they have been guiding lower and you keep seeing that. tom: economic data in one hour, key according to jean boivin. stay with us. this is "bloomberg surveillance". ♪ small, angi helps you find the right so for whatever you need done. with angi, you can connect with and see ratings and reviews. just search or scroll to see upf on hundreds of projects. and when you book and pay throug you're covered by our happiness it's easy to make your home an a check out angi.com today. angi... and done.

tom: bloomberg surveillance and we are one hour on from key economic data. you get to friday and there is some real import to it. on the data, a lift to the market. lisa will chime in here because she has all the numbers on nasdaq. lisa: and they think it has more to go because people are still spending. tom: small caps are up today. the real yield.

oil is stashing to 75, not quite there yet. brent crude with the lift as well. there can be movers and then there can be the individual names of the moment. lisa: i'm trying to stay away from the bank stocks because i want to see if we can shift on yet. tom: the market has come back but not the index. lisa: is this just a sign in the change of profitability with the flood of cash out of banks and into moneymaking funds. this is digital world acquisition corp. and its up 10%. tom: do you have a y on this?

lisa: throwing this at the wall, publicity is good for people who want to get eyeballs. the idea of a media company, look at what everyone is talking about this morning. looking at virgin orbit holdings that provides launch services for small satellite saying it would write down its operations. it was cutting 85% of its workforce because of the lack of meaningful funding. one of the casualties of the funding squeeze.

so how many stories have been challenged that suddenly imploding? tom: this is the gloom stock check. you have a former presidents indictment, branson is blowing up and then what's the next one? lisa: let's be very clear, blackberry used those devices with your thumbnails. it is now a cybersecurity company. fourth-quarter estimates or revenue i should say missed estimates and there were concerns with government deals slipping when there is going to be a lot of competition for the services. tom: that was the worst market

movers you have ever done. it is so gloomy. lisa: happy friday. tom: could you not throw an apple in there? lisa: apple is down .1%. thank you for that insight. we are waiting for michael mckee's interview with susan collins. unlike my terrible market movers. it will follow that core pce data. they have seen a pretty wide range of outcomes for the next bed meeting. you convince yourself that inflation is settling or this is a blip that is largely behind us or you are convinced this is continuing. talk about a soup from top officials. tom: soup is when you can't

really read what's going on. this is a soup we have never been in. lisa: we are looking from guides from fed officials and they say convince yourselves of whatever you want. tom: rj gallo at federated investment. lisa has a lot of good questions about our questions into investment. i wanted to talk about your true expertise in municipal finance. is it harmed by this banking crisis? rj: good morning and thank you for having me. so far, the municipal market has waded through this rather well. municipal yields have held stable.

the municipal market still has strong demand, a lot of real estate investors coming in and direct bonds. the mutual funds have been a little more quiet. the key thing to watch on the muni side is banks hold 15% of the outstanding supply of municipal bonds and those are held away from the -- so far, muniz have done well but that is a risk factor to watch. we are optimistic it won't be a big problem but you have to see how it holds. tom: how is federated going to be optimistic -- opportunistic

with the massive flow to money market funds? rj: cash is a valid asset class. people want stability, they want some nominal income. if you look at government money market funds, you have yields at 4.5%. that's a high number compared to the last decade who wanted relative safety instability but only got a little over 0% and that asset class. we are in a good position to provide these solutions to investors who are looking for safety and security and get them some yields because the interest rate environment has transformed . lisa: i love that you have a

view into municipalities. commercial real estate, people talk about how that's the next shoe to drop. is it expecting -- impacting valuations? rj: we have been talking about this for well over a year. the work from home dynamic fundamentally transformed the risk profile of office properties from a municipal standpoint. there is a variety of daisychain effects. office property is declining in value. it will have an impact on the value of mortgages. a lot of regional and local banks finance plenty of

commercial properties and some of those properties will become struggling assets on the balance sheets. on the muni side there is such d when it shows up in tax assessment. so far, you are not seen financial results at all. municipalities are coming into a period of growth. it is a key risk to watch. as investors we are focused on those communities that have high concentrations of office property without diversification of other sorts of properties. there are often times smaller communities that have a narrower tax base where offices are disproportionately large. it will take a couple of years for this to unfold.

lisa: we have seen a number of see changes post-pandemic including people migrating to the sunbelt. do you see an increase in the sunbelt states? rj: there has been a shift in issuance volume across the municipally market. the largest states have the most infrastructure. the primary means through which we finance infrastructure and we are seeing shift in the composition of the market as people migrate out of the northeast and upper northwest and into the southeast. the credit quality of the states is quite strong right now. one of the states that has been losing people, illinois has experienced upgrades into the

single a territory after years in the bbb's. states are strong and this migration issue is something to watch. tom: too much optimism. it's something we don't do enough. we are guilty of that, we don't do enough on the taking effective tax-free bonds. lisa: especially right now when they are yielding something which is why we have had so many people say this is the year of the bond. tom: federated with their history with the money market fund. apple computer in premarket

still down .1%. lisa: tom wanted to give the competing market check to competing market movers. it's a blackberry and virgin. what is interesting about this polarity in the market. the lift in the spx is eight stocks. i don't know how to process that. lisa: you take a look under the hood and you see some shifts. you don't get any clarity there either. tom: we will do an entire segment on the triple levers of cash funds. 8:45 we will have susan collins with michael mckee. good morning. lisa: keeping you up-to-date with news from around the world. history has been made as donald

trump the first president to face criminal charges. the manhattan grand jury says there was enough evidence to move with the case for him paying hush money during the 2016 election. he could be arraigned as early as tuesday. trump described the case as democrats trying to destroy the movement. china has tried to downplay the effects of taiwan's leaders to new york. in the euro area, inflation fell by the most on record but core inflation set a new high. that highlights a tricky task for the european bank as they decide how high to raise interest rates.

core inflation which excludes items such as energy rose 5.7% the u.k. is joining the and pacific block. the 11 nation transpacific partnership includes australia japan and canada. that can grow if others join the block. powered by more than 2700 journalists and analysts in more than 120 countries. i am lisa mateo and this is bloomberg. ever better. it's when disruption hits your supply chain and ryder makes sure you're ever delivering with freight brokerage to transportation management, truckload capacity and dedicated trucks and drivers.

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trump has a better chance of winning the nomination and the worst chance of winning the election. tom: one common ground is given this historic moment for the nation and the presumed tuesday arraignment we will talk to people with decades of experience. one of those is to get federal former prosecutors with the steamed history. michael zeldin as an adjunct professor at american university. thank you for joining us. what was your first day of justice like ages ago.

his the justice department now the same one where you works at years ago? michael: under merrick garland they are committed to the rule of law and following the facts and the law into dispense justice evenhandedly. tom: what will we see tuesday? a presumed arraignment of x number of items. can you pre-analyze that? michael: we can guess that trump is going to be charged with campaign violations and a business records violation. the business records will probably be 10 or 12 different business entries that reflected payment to michael cohen for legal fees which were repayment of the stormy daniels hush money payment.

it really boils down to one hush money payment and a 12 part reimbursement to cohen for that. that is a business crime offense in new york and it's a misdemeanor. they can make it a felony if they say those payments were made as part of another crime and that crime would be of federal campaign election crime. a theory not previously tested to new york. it's not a simple case but that will be the outline of what we will see on tuesday. lisa: there are people who are frustrated to being brought back into the hush money payments to people who may or may not of had affairs. this is the consequence of an era that people want to move on from but the erosion of the

trust in the judicial system continues. how much do prosecutors way this type of social response going forward? michael: it's a part of the calculus but not the primary calculus. were laws violated and is accountability required for that law violation? in this case, though it is an old case by current standards it is a case that the manhattan district attorney's office felt accountability was required. it is true that people would like to move on from this but they would also like to move on from january 6 and there needs to be accountability there. they want to move on from all sorts of things of the trump era. we need a reconciliation so we can learn from it and move forward. lisa: given the fact that you

talked about the nature of this particular crime, do you think there will be blowback to new york prosecutors because of this? michael: he has already been labeled as a soros funded liberal and a racist by the former president. i think part of the strategy is to demonize brag and try to delegitimize the prosecution. tom: i remember exactly where i was standing on the oj decision years ago and you provided the nation with legal coverage at that time. donald trump was 20 eight years old in 1974 in the scandal in the jefferson tidal basin.

has the job change for federal prosecutors because of the cultural acceptance of this or that buys along the way? is the job of your world totally different than it was in 1974? michael: when fanny fox fall into the tidal basin they were not talking in me to terms. that was thought of that's the way the system works. in the aftermath of the #metoo movement, that sort of behavior is intolerable and that's good. had bill clinton done what he did with monica lewinsky now he would have been removed from the office of president. we are out a better time now than we were then with respect to this misogynistic behavior. tom: for our international

audience, what should they look for on tuesday when we get this arraignment? how should we approach the news frenzy? michael: i think a lot of that depends on how donald trump wants to play this. if he wants to do with the justice department would like to do, he will come in through a private entrance in the car. he will go up the judges's elevators and go into the courtroom and make his not guilty plea. he will be fingerprinted and mug shot it and be free. if he elects to make a spectacle of it, wanting to be handcuffed or go out and front of the court and talk about how he is the most persecuted person in the history of america. then he will have a street scene that won't be controllable as

easily. hopefully, he will do the right thing and try this case in the court of law that he is who he is and he will do what he thinks is in his best interest. tom: thank you for joining bloomberg surveillance. he is a former public prosecutor with years of service. i am the amateur on this but i was taking notes. that was very interesting. lisa: considering the election cycle last two years we will hear about what this means for the application for the race for the next president. we're looking to move on from the maelstrom of the past three months. do we have more clarity on march

31? tom: this is why john was off today. he called me last night i was having a beverage of my choice. he said can you handle the show. the first few pages are a lot but he struggled with his dear out outlook. lisa: this is been the issue this year. blink he will get into the same place. tom: i go back to the great charts. we will see jim? in the 8:00 hour. susan collins with michael mckee. i want to draw your attention to a special announcement.

balance with an important guess, mick mulvaney will join. look for that at 5:00 p.m.. futures of seven. we are 30 minutes away from key economic data. stay with us, lisa abramowicz and tom keene. good morning. ♪

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the question can central banks have a foot on the gas and the break at the same time? >> this is bloomberg surveillance with tom keene jonathan ferro and lisa abramowicz. lisa: now we get the data that matters. bloomberg surveillance live on bloomberg television radio. jonathan ferro was off today we are looking for some clarity and we get some in about half an hour. tom: i forget how much we are hinged on this friday and to

your point on the confidence of the nation we get the economic conference of the nation and we forget among high inflation. lisa: we have been talking about disinflationary tightening and we have seen it in the data. and yet it is it crimping inflation yet so how will the market comes in hotter than expected? tom: the court is down 4.7%. there are surprises out of europe, there is a mystery to what we will see in 27 minutes. lisa: we got weaker than expected numbers due to energy

disinflation. this is the last trading day of this quarter and it has been an absolute roller coaster of data, narratives, fed speak and we are not ending it with any more clarity than when we began. tom: i think less. the money market funds weren't there january 1. we will have michael mckee with susan collins. luzzetti shows up as well as jim bianco. lisa: you can convince yourself of anything you want. there is less certainty as

people are looking for confirmation bias in the data. tom: i mention this yesterday, 1200 college kids, the gift i give to college kids. lisa: when there is immeasurably uncertain t, buy stocks. the s&p is up 6% year to date. the shocking outperformance has come from the big tech block. tom: when you have a shocking uncertainty you bring in annmarie hordern. lisa: you keep mentioning the

political maelstrom. former president trump was indicted by the new york authorities. he will be arraigned on tuesday. he has not had the complaint revealed so we don't know the details but we are getting reaction from different political operatives and a sense for what this might mean for the presidential election upcoming. annmarie hordern is joining us now. what has been your biggest take away from this whole affair? annmarie: there are too many questions, we just don't know. this indictment is under seal we won't know what these charges are until the former president shows up for his arraignment on tuesday. what we do see is a polarized america and this will harden that polarization.

there are still so many questions. tom: jump in here as well. i was dazzled by michael zelden. these guys just do their job, they are apolitical. annmarie: that's not what republicans say. tom: president trump did not suggest that. annmarie: republicans say this is politically motivated and they think this is a witch hunt. what you would see in congress is people like jim jordan and comber talking about a subpoena for alvin bragg to show their documents in terms of how they came about this indictment. tom: i'm surrounded by mets

fans. i'm surrounded by people who know what they're talking about. as a federal prosecutor -- is a federal prosecutor in dallas, texas than it is in new york city? lisa: we will parse through all of those details but what i've been looking at is the overall implications and i look at polling. i want to know what the wider implications are. last year, only 14% of respondents had a great deal of faith in the criminal justice system. that is down 20%. most americans feel that prosecution of trump's tinge. 80% of republicans felt this was

politically motivated. in a fox news poll said trump was expanding his lead over the republican candidate. former president trump has a greater chance of becoming the republican candidate. lisa: people run on grievances and he is campaigning on it. last night they sent out campaign emails. when the fbi went into merrill law ago he was bringing in 180000 and campaigns. this is how he makes money. maybe he becomes the candidate but biden beats him in the polling. tom: what will we here on this sunday talk shows? lisa: it will be polarized.

you will not hear from the white house. the former president is in mar-a-lago concerned about his political and legal future. the current president will be in mississippi touring the tornado sites. tom: balance of power tonight. look for that of 5:00 p.m.. michael mckee, in europe the vectors of inflation are confused are we as confused with the trend of topline inflation and core inflation? mike: i don't think so. we are happy with the way things are going because energy prices are falling and that's bringing

down the overall index. it's the core services has the government worried. their biggest cost is labor and labor prices have been going up. we will see what those indexes indicate about progress against inflation. it's a race between income and spending because as the economy is slowing, that will be the question for the fed. lisa: you asked one of the best questions what do you think about pricing in rate because when there's not even on the table? mike: they are waiting for the data to push back. if inflation comes in as strong

levels in the economy hang seng that makes the case that the markets are wrong and they will not have to cut rates because we are not falling into a recession. they will let the data do the work for them. tom: thank you so much we will see you again in 19 minutes. he has a key interview with susan collins. 5%, 4.9 percent is not 5%? lisa: money keeps going into money market accounts. what does it take for people to want to put their money in cash? it's a lack of optimism. to me that is the question, the tension under pending wise some of the recent moves don't add up. tom: maybe it is price up and

kneeled down. three month libor, 5.19%. i am in a camp that the drama is over. but now, the emotion starts with what people do with their money. lisa: and now banks won't give you that extra credit line. tom: his office is lined with toasters from banks. jim bianco leading the zeitgeist right now. he will be with us soon, stay with us. lisa: keeping you up-to-date with news from around the world. as you have been hearing, for the first time ever of former

u.s. president has been indicted. donald trump expected to be arraigned on charges by tuesday. they decided there was enough evidence to proceed with the case against him for hush money payments. the charges have not made public. a bipartisan senate effort to shore up social security is hitting a political roadblock. there are two problems, president biden that republicans want to cut benefits and trump's promise to leave entitlements alone. vindman has cleared the final obstacle to joining nato. lawmakers in turkey voted to ratify finland's entry into military alliance. finland and sweden sought nato

membership after the invasion of ukraine. and bitcoin has made a surprisingly fast exit from the crypto winter. the digital currency is closing out its best quarter in two years and it's the best performing asset class by a wide margin. powered by more than 2700 journalists and analysts in more than 120 countries. i am lisa mateo and this is bloomberg. ♪

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>> we need to finish business to see if the may have gone too far and repair the cracks that the recent jobs are revealed. tom: just a terrific lineup, and michael mckee is in attendance. an important interview with susan collins. one of the great joys here, our bookers always get the best people.

the surprise of jim beyonca walking into the room. lisa: i got it on a run down before. i was going to come. tom: i never look at the rundown either. this is why beyonca is in new york. he will be ensconced before 1200 college kids. it is spectacular. here i was with four esteemed economists in front of 1200 smart college kids. a major shout out to quinnipiac college. elon musk meet jim bianco he

has definitely led on twitter with intelligent threads. the deposit flows have stopped where are we right now? jim: if you go prior to march 8 a huge amount of money is moving from the banks to higher-yielding alternatives, treasury bills, etf's that are short-term. the public has woken up and found out they are getting 0% at the bank i can get 4.5 somewhere else. tom: is it still destabilizing? jim: the initial response, is

another big going to fail? probably not. will there be a hemorrhage? is a public going to slow down. i am fine with two basis points in my account? the flow away from low yielding bank deposits will continue. lisa: let's talk about money market funds which reached 5.2 billion. we have seen an increase at an astronomical rate. that's taking us back to the pandemic era. where do you expect this to go? where will this hit the breaking point when you see the ramification of the rate hikes?

jim: once you see the spreads between market rates collapse, that will continue. keep in mind, in a post-financial crisis era, 75% of the money invested by the money market fund is either in a t-bill or federal reserve repo. they are funding the government and the fed now. lisa: translate this into six months from now with access to credit. how much more do you see that number getting priced in? jim: the regional banks are 6.8

trillion in assets, there larger than jp morgan. they fun personal loans commercial real estate and commercial and industrial loans. if they are losing their depositor base they will pull back on their lending. from regulators and bankers a bank is accredited in remediation. a way to get alone and extend a business. if the warehouse of money is going somewhere else that lending action is going to change. lisa: where do we not see this being priced in? jim: our bank stocks pricing in

defaults or failure or a squeeze of their margins because they will have to raise deposit rates. the bank stocks have not really recovered because there is a worry that in order to get past this problem it may cost them money. tom: the fed here, what is the efficacy of a pause right now, how about three pauses just to wait and see until july where we are? jim: if we continue to have a credit crisis but the fed is not inking pause right now. they are thinking about a pre-march 8 world and whether or not we will continue to see high

inflation, persistent inflation. if that is what they believe they will continue to move forward with rate hikes. if we see a slowdown in credit, that should lead them to a pause. tom: what about the cubs versus white sox? jim: they're both out at 100% right now. tom: who are they going to support? jim: i'm leaning towards the cubs. that the more interesting team right now. congratulations on being definitive on twitter. there are other people out there as well, but when bianco puts

out a thread. lisa: when he was talking about parsing the credit impulse of these smaller banks with how the fed response, it's an incredibly difficult moment because we see unprecedented volatility in the short and rates. lisa: do you think the fed can avoid cutting rates? jim: if the economy does take a dive they'll have to respond to it. they don't want to do it but they will be forced into doing it if we have that kind of credit problem.

watch for the core, it's been surprising to the upside. that will give the fed more impetus to raise rates. tom: you've seen that in spain. jim bianco has been here. the data coming up, matthew luzzetti as scheduled to be here as well as susan collins with michael mckee at 8:45. ♪

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tom: thank you for joining us, a major shout out to our booking team. we have a friday of economic data. michael mckee has an interview with susan collins from the fed. mike, what do you see as we begin to see the data stagger across the screen? mike: staggering is the way it

is. first numbers we get our personal income and spending. personal income comes in higher than anticipated but down from january. this isn't a complete surprise because in january you have salary increases. but consumer spending, it only rises .2%. we heard from credit cards that spending momentum has been dropping. we will ask president collins about that. the inflation numbers, personal consumption index is up .3 percent. that moves the year-over-year down to 5%, lower than

anticipated. the court comes in .03% lighter. inflation is slowing but the economy also slowing in these numbers. tom: we will come back to michael mckee after he has a chance to go over that data. the two year yield is up at 4.0976. the 10 year at 3.53. before we get to matt luzzetti.

set up the distinction over the month over month and year-over-year core. mike: when you're looking at sequential progress you look at the month over month because it tells you what happens in the most recent months as compared to a year ago. there were completely different circumstances a year ago so everyone is looking at that number that is from just this month and they come in lower than anticipated. that is good news for a fed that is looking for progress against inflation. tom: thank you so much, in minutes with susan collins of the boston fed. with us now is matt luzzetti.

they had an economic slowdown when so many others were looking for an immediate economic slow. we recalibrate this morning. can you establish disinflationary factors in goods and services? matt: core cpe is well above the fed's objective. we were expecting this to be softer than the cpi. we see it softer but still defensive. lisa: inflation is not as hot but growth is slowing more than people had been expecting. we decide story get priced and more?

matthew: we saw with the gdp revisions, consumer spending revised down. the domestic economy did not grow in q4. i think you have evidence of slowing in the economy. there was a lot of strength in january and a lot of this is a giveback. do we begin to see the labor market softened? employment gain slowing, unemployment picking up? lisa: a lot of people wonder if the fed is going to cut rates in the face of weakness right now. how was the response going to be at a time when inflation is well above their targets? and a lot of people think it will continue to do so as time grinds on? matthew: inflation is well above

their objective. the labor market is either extremely tight or tight to an unhealthy degree. the real issue comes when the tension arises. it begins to arise this year with the unemployment rate increase where inflation is above there objectives. we expect that they cut rates in january but it depends on how this credit shock plays out? tom: susan collins will be with us in 10 minutes with michael mckee. she is a definitive academic from ucla. michigan has a cottage industry of studying inflation and price change. when they debated the fed, when

susan collins talks about inflation does she talk about the same inflation as everyone else? matthew: her speech was very clear. she spoke about the three components that chairman powell has emphasized. she used the language about rate hikes that was different, additional tightening will be necessary. i thought that was a firmer indication of another rate hike at the may meeting but i was surprised by that. tom: i was at the quinnipiac forum yesterday. what is the efficacy of a pause when you would deutsche bank say lift, cut or pause.

a pause gives you optionality? matthew: it can but it's a multifaceted question. if they pause what does the market do in response to that? they have been pricing in rate cuts, if they pause they price encode sooner? tom: they can even say there pause just for the data. lisa: i am distracted because i'm trying to understand this market movement. it seems to say a soft landing seems more certain after this data. what is your take on that? what we have seen from the data and response mechanism that we are heading closer or further away from a soft landing? matthew: it depends on how you view the credit shock. to be honest, it is speculative because we don't have data on how it is playing out.

we are looking at the data later today to see what's happening on the loans. we saw an aggregate reduction in their lending capacity. it is difficult to gauge. if the fed tightens i think a hard landing is more likely. tom: oil was $75 a barrel. from $69 to 75, this correlated lift from all the gloom. lisa: oil has been its own animal but there has been this feeling and if there is a down torn it will be short and shallow.

if we prolong some kind of recession it will be a worse recession? matthew: not necessarily. imbalances can build up the longer this goes on so therefore the recession can be deeper as you deliver. we have not seen those imbalances being built. you have a housing market without overbuilding. this is a moderate recession that looks like the early 1990's. it's consistent with what we are seeing. just because we got a .3 on core pce does not mean we have a soft landing. tom: the to your guild comes in a 4.62. let's review your homerun call.

when you said recession they got bent out of shape. what economic data would force you to move your recession call that has been fabulous into 2024. matthew: it's about the labor market and what you are seeing. if you see the unemployment rate rise it shows a recession is happening. if we are producing strong wage gains in the consumer can remain resilient. tom: i missed it yesterday because i was at quinnipiac. claims 191 two 198.10. lisa: it's still below 200,000, you are not seeing in the key

metrics of the labor market that will signal to the fed that we are seeing weakness. we will carry this conversation forward on the open. i am headed over there. tom: are you just gonna talk about the mets over there? lisa: all coming up in the open, terry haines, david balin. susan collins and michael mckee are next. that's on bloomberg surveillance. lisa: keeping you up-to-date with news from around the world. history has been made as donald trump becomes the first former u.s. president to face a

criminal charge's. there was enough evidence to move against his case for playing hush money to a port star during the 2016 campaign. he could be arraigned as early as tuesday. trump says it's the latest strategy by democrats to ruin his movement. the relationship with china and taiwan is getting worse. beijing's unhappiness is muted. in the euro area, inflation fell by the most on record but core inflation is not a new high. that highlights a tricky task for the european central bank's as it decides how high to raise rates. core inflation which excludes

items like energy rose 5.7%. version orbit is ending operations indefinitely. version orbit is cutting 675 jobs, 85% of its workforce. it's tied to richard branson and had a high profile launch failure in january. powered by more than 2700 journalists and analysts in more than 120 countries. i am lisa mateo, and this is bloomberg. ♪

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regulators are standing behind the banking system. it might take a while if there are more losses out there. it's unclear right now, how much of the banking stressors of the past few weeks is leading to a sustained credit crunch which would then slow down the u.s. economy? tom: neel kashkari showing the strength of the federal reserve system. right now, we will do this quickly, susan collins is associated with the university of michigan and her stirring academics at harvard and m.i.t.. michael mckee plunging into the federal reserve of boston. mike: we have the boston fed

president here with us and we would like to thank you for joining us here at bloomberg and to our audience around the world. thank you for joining us. let's start with the numbers because they just came out. personal income .3, .3 for the pce for the headline. what does this tell you about the state of the economy and where the fed is? susan: i'm absolutely delighted to be here with you. i haven't had a chance to dig deeply into the numbers yet. sometimes the details are important when trying to understand the story. starting with pce inflation, that was about what was expected. that is some positive news.

let me say two things about that. one month of a move in a helpful direction is not something that indicates a sustained change. the other thing i will say, recognizing the elevated numbers we saw in december and january, this bit lower number just means the three-month average is about what the 12 month averages. we still have more work to do and more to see to know that is inflation is on a downward path. mike: you are on record saying that you favor one more move. is it a lock-in for may. if inflation is still at a high level and we don't pause for a month to see where we are? susan: i am highly data

dependent. my assessment at the last meeting last week with the summer economic projections did suggest an additional rate hike and pausing and holding over the year. i need to assess all of the data coming in between now and our next meeting in may. where i am at the moment, that new data that i have seen the past week has not changed what i think about things but i don't make a decision this far in advance. mike: the markets are pricing and for rate hikes. our traders crazy? susan: there is a range of views about these things. when we talk about high stability, that means a level of low, stable inflation. everybody is thinking about

inflation and that does mean we have more work to do what history is told us, you need to have condition sufficiently tight and hold the course in order to know that you have gotten inflation going back to the target. mike: spending was decelerated during the month of february. do you worry about going too far and tipping the country into recession? that is the standard view of what the fed does. susan: it is absolutely a balance and i think it's important to recognize that there are uncertainties and risks and in particular, we need to balance the risk that we don't do enough. that we are not sustained and don't hold the course. that we don't bring inflation down. inflation is really costly to businesses and households. at the same time, i monitored

the data looking at when we might see the economy turning and some of the slower data is helpful in that context. that is what we would hope to see. at the same time, early days yet in terms of assessing whether we have gone as far as we need to go. mike: do you have any assessment on what the recent banking issues will have on the economy? there is a theory that banks will tighten credit and that could send us into a recession? susan: there is that theory out there and we could see some of that. my expectation is that we are likely to see some but we will have to continue to monitor the data and see what happens in terms of how things evolve. as i have said, i expected that early in march i might think we

would need to do more work in the banking stresses are a possible response of banks to their own liquidity needs have influence that. that's one of the important things to factor in. i want to emphasize that i continue to see there is a pathway where we can bring inflation down without a significant downturn. monitoring holistically that range of data in balance is an important factor in that outlook. mike: do you think the fed bears any responsibility to what happened to the banks? susan: i think there were a number of mistakes and challenges made. i think it's really important that the review that vice chair bar is conducting continue unfettered and we not prejudge

the lessons and findings of that report but we connect with them with a sense of humility that we take those findings seriously and act on them. mike: what are banks in your districts telling you about their situation? susan: we monitor very closely with the banks throughout our first district which is most of new england. we are seeing that they are focused on their activities to support communities throughout our district. small and medium banks play a critical role in a vibrant economy and they are particularly focused on what some of the risks might be in the aftermath of some of the stresses we have seen. we very much work to support those activities and appreciate

the work they are doing. mike: you and your colleagues talk about the cumulative impact of the rate increases. has not hit yet? when will we see a 5.5% rate hike show its impact? susan: there are absolutely logs. some sectors of the economy that see the increase in rates and respond quickly. we put housing markets there. we saw responses and housing markets relatively quickly. at the same time, labor markets are impacted over time and it's only in the second half of 2022 that our interest rates got to a broader range that were quite restrictive. my assessment is that it will be sometime but over the coming

quarters we should see other sectors of the economy respond to the tightening that is already factoring through the system. mike: one last question, the red sox lost yesterday and you are on record as saying the season is over. is the season over for the red sox? susan: absolutely not. we look forward to our teams having a wonderful season and exciting games ahead. tom: she absolutely mailed out. last night, justin turner, the new red sox and watching the broom and storm the hockey league. we are watching equities lift

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quick's a bit of calm two and a quarter of incredible games -- gains. the countdown to the open starts now. >> everything you need to get set for the start of u.s. trading. this is blue the open. -- bloomberg the open. ♪ >> coming up, looking to close